Activision Blizzard Q4 2020 Investor Call

Originally Posted by Kralljin

2019 = Not an expansion year
2020 = An expansion year

Add that Blizzard also sold now a 3rd edition for 80 bucks.
Also, 2020 was dominated by lockdowns, which obviously helped out gaming companies a lot, whereas 2019 was "normal".

Funny you say that

Because i think is really interesting Blizzard made more money from Oct-Dec of 2019 compared to Oct-Dec of 2020
100 MILLION more dollars in 2019

Isnt this interesting?
The only thing that happened in that time in 2019 was 1) Blizzcon 2) Classic WoW released a couple months back

But still...they made a shit ton more money in 2020 in total

Originally Posted by twothe

If you combine that with the fact that the number of MAUs declined despite a new expansion release - historically MAUs spiked at such events - it means people mostly shifted over from other Blizz games. That means Shadowlands failed to spark the interest of players outside the core WoW community. Essentially if you release a new major update and no one cares, that means the game is in a critical state. There are always people leaving a game for various reasons, and if you can't get new players or retired players to pick up the game with a fresh update, that means your game is beginning to decay.

Your post is complete nonsense but this part stands out to me.

The over all number of MAU going down and the number of wow MAU going up in no way means that it was just people moving from other blizzard games and not outside people coming in, that’s just not how any thing works.

Interest in wow absolutely spiked as evident from things like highest day one sales, MAU rising, they then selfs saying interest is at its highest point in a decade, ect.

Originally Posted by Shadoowpunk

Because i think is really interesting Blizzard made more money from Oct-Dec of 2019 compared to Oct-Dec of 2020
100 MILLION more dollars in 2019

And this logically suggests that Blizzard made a lot of revenue the first three quarters, where the Corona lockdown was already massive factor.

Nevermind that those quarterly figures possibly include SL pre orders, thus reducing the profit of Q4 in favour of Q1-3.

Originally Posted by Shadoowpunk

1) Blizzcon

40 bucks for a stream and some collectible is sure good business.

Originally Posted by Kralljin

And this logically suggests that Blizzard made a lot of revenue the first three quarters, where the Corona lockdown was already massive factor.

Nevermind that those quarterly figures possibly include SL pre orders, thus reducing the profit of Q4 in favour of Q1-3.

Sales in the earlier quarters will not be reported as sales until the expansion is released - all pre-orders would have been recorded in Q4.

Originally Posted by Kralljin

And this logically suggests that Blizzard made a lot of revenue the first three quarters, where the Corona lockdown was already massive factor.

Nevermind that those quarterly figures possibly include SL pre orders, thus reducing the profit of Q4 in favour of Q1-3.

40 bucks for a stream and some collectible is sure good business.

Wait...im looking again at page 17 of the Earnings PDF

What i said is not the total truth.
What actually happened was:

Oct-Dec 2019 Blizzard made 595 M in revenue AND 260 M in profit
Oct-Dec 2020 Blizzard made 579 M in revenue AND 160 M in profit

So...this only means in 2020 Blizzard had more "costs" in stuff.
They had much more costs in 2020 for some reason.

LoL

Originally Posted by Kolvarg

I'll just leave this here:




Technically yes, but that does not necessarily mean it was the best state of the game even from a numbers perspective. WotLK was the peak of concurrent subscribers yes, but it was also when the number of subscribers stagnated - whereas during Classic and TBC it grew exponentially.

It's important not to forget that when subscriber numbers are stable (ie one quarter has 10M, the next quarter still has 10M), it doesn't mean that no one unsubscribed. It just means the net didn't change. There might have been 500k people unsubscribing and 500k different people re-subscribing - the net would be 0. Or it might have even been 1M unsubscribing and 1M subscribing.

Ultimately, I sincerely doubt any specific state of the game - when it comes to individual mechanics or design choices - had any noticeable impact on the growth, stagnation, decline and maturity of the game. It has more to do with timing, luck, marketing and word of mouth.

Bruh did you just use google trends as an argument

Originally Posted by twothe

That is the point. To understand marketing speech you need to first define what is the best thing they could have said, and then compare it to what they actually said, and try to figure out why they said that instead of the best thing possible.

The best news would have been "Shadowlands is the best selling expansion of all times." They did not say that, they just referred to the first 24h. They said that, because outside those 24h numbers obviously don't look that shiny anymore. Also keep in mind that you could easily pre-order the expansion beforehand like on previous expansions, so a lot of people intentionally waited before they bought the expansion. They don't seem to trust Blizz anymore in producing high-quality Expansions it seems.

What's also important is how many ppl continue their sub after the first month. The best thing Blizz could have said here would have been something like "The highest amount of players ever continued their sub." They didn't say that. They didn't say "high" nor compared it to the level of MAUs with other expansions. They said the number of players was "steady." That's like the lowest award you can give, effectively saying: "Numbers weren't that high, but at least not so many people left."

If you combine that with the fact that the number of MAUs declined despite a new expansion release - historically MAUs spiked at such events - it means people mostly shifted over from other Blizz games. That means Shadowlands failed to spark the interest of players outside the core WoW community. Essentially if you release a new major update and no one cares, that means the game is in a critical state. There are always people leaving a game for various reasons, and if you can't get new players or retired players to pick up the game with a fresh update, that means your game is beginning to decay.

That doesn't mean WoW is dead just yet, over 3M players means they still have more customers than many other MMOs out there combined, but it also means that the new direction of the game doesn't seem to interest people as much as the ancient classic version of the game. And that's something that the Blizz devs should - and most certainly did - think about.

My guess: it's a mix of the new story telling, and the decline of community quality that drives the people away.

I'd say you don't need to keep going after having a great 24 hours. The MAUs suggest it has done quite well not just a good 24 hr initial sale.

They are not going to comment on subs becasue they don't really matter. So any comment about them is fruitless. They have earnings and activity increases. I think that pretty much tells you how well those subs are doing. For example, I have kept an active sub from day one outside of a few hour period when my CC expired. When I started my business I went about 3-4 months without ever logging in. How does that help inform anyone about anything. I paid but I didn't use the product. Investors care about engagement of a product after it being profitable. Subs don't give any information on that. Fact is Engagement went up, revenues went up, it's doing fine and has done fine aft the initial 24 hour period of SL launch.

You guys need to get it through your heads. Sub counts doesn't matter to anyone outside of forum goers. If it did, they would still be reporting them. If they were so important how come other games don't report them? How come SE only posts their online account info as regards to how many people have created a SE account? Player engagement is what matters. If you have 12M accounts and 1M are active what good is that 12M number?

Originally Posted by Shadoowpunk

Funny you say that

Because i think is really interesting Blizzard made more money from Oct-Dec of 2019 compared to Oct-Dec of 2020
100 MILLION more dollars in 2019

Isnt this interesting?
The only thing that happened in that time in 2019 was 1) Blizzcon 2) Classic WoW released a couple months back

But still...they made a shit ton more money in 2020 in total

The revenue difference was smaller than the profit difference in that period. Could suggest they had more costs for something, or such things.

Originally Posted by Shadoowpunk

Wait...im looking again at page 17 of the Earnings PDF

What i said is not the total truth.
What actually happened was:

Oct-Dec 2019 Blizzard made 595 M in revenue AND 260 M in profit
Oct-Dec 2020 Blizzard made 579 M in revenue AND 160 M in profit

So...this only means in 2020 Blizzard had more "costs" in stuff.
They had much more costs in 2020 for some reason.

LoL

They've been hiring and working on more projects. It makes sense.

Originally Posted by Asrialol

The revenue difference was smaller than the profit difference in that period. Could suggest they had more costs for something, or such things.

Yeah, i said that on post below...they just had more costs revenue was virtually the same

Originally Posted by Pann

Sales in the earlier quarters will not be reported as sales until the expansion is released - all pre-orders would have been recorded in Q4.

I'm not sure about that. Unless laws are different in California. I took prepayments all year long for our services. They were all recorded as revenues for those months they were received regardless if the work hadn't been done. Even in Nov-Dec if a customer prepaid for the following years service. It was recorded as revenues for that year not the following.

Originally Posted by SirBeef

I'm not sure about that. Unless laws are different in California. I took prepayments all year long for our services. They were all recorded as revenues for those months they were received regardless if the work hadn't been done. Even in Nov-Dec if a customer prepaid for the following years service. It was recorded as revenues for that year not the following.

Then you are recording them incorrectly and your accounts are not a true reflection of the business' performance or financial position. Pre-orders should be recorded as a liability until the time the product or service is provided to the customer at which point it is then recorded as sales income as set out in IAS 18.

Originally Posted by Pann

Then you are recording them incorrectly and your accounts are not a true reflection of the business' performance or financial position. Pre-orders should be recorded as a liability until the time the product or service is provided to the customer at which point it is then recorded as sales income as set out in IAS 18.

It was never an issue during tax time nor during the 3 audits we had either. Could it be becasue customers received "free"a winter package of ice melt as part of any prepayments? Or that they were always in full? I just know what my accountant did and it never seemed to be an issue.

Originally Posted by Dracullus

Yes, I'm pretty sure more (and by "more" for sure I don't mean "slightly more") people were interested in news about SL Alpha than release of Zul'Gurub in WoW Classic. I don't want to offend you, but I really believe people someone thinking otherwise are detached from reality or live in very small Classic bubble.

And is there any actual evidence that leads you to believe this other than your belief, or do you just assume you're right and everyone who disagrees with you is detached from reality?

Originally Posted by SirBeef

So then please provide proof of investment fraud.

Where have I accused anyone of investment fraud?

Originally Posted by Asrialol

Bruh did you just use google trends as an argument

Did I?

Originally Posted by twothe

*snip*

The thing is there's too much guesswork to really tell one way or another. I'll defend vehemently that we shouldn't take everything Blizzard says at face value, especially what is said in investor calls, but to make such a claim is to really just be convinced of a belief with no real evidence, the other way around.

Realistically, it's very possible that Shadowlands did not do as well as other expansions, but WoW in general is still doing very well because of the mix of Shadowlands + Classic. But that's not at all what I'd call a critical state, and we certainly don't know it for sure.

Ultimately the game as been in decay for 10 years, with the spikes of expansion launching never really being able to stagnate the trend. If the trends line is anything to go by at all, then it would suggest that throughout BfA and with the release of Classic WoW has not only stagnated the decay, but even potentially started a small resurgence. I don't completely exlude the possibility that Classic might even be the greater role in that, but even if it is, alone it wouldn't stop the decay at all - certainly not forever. The alternate release of Classic and New expansions, though, could be essential in revitalizing the game.

I don't know, first of all it's important to remember not to forget the value of nostalgia. And this is not to say that it doesn't has its merits, it does. It just means that part of why Classic did so well is because WoW is so popular and infamous in the first place. Similarly to how the recent disney remakes are super popular and succesful, without necessarily being great movies.

With that in mind, I'm not sure changing WoW's modern design to be more like Classic would be the way to go. Ultimately what they have, essentially, is 2 different games that appeal to 2 different audiences, with some overlap. If they choose to only cater to one of them, they'll lose the other. To me the best approach seems to be what they're already doing: keep providing Classic, for those who like Classic, and keep providing modern WoW, for those who like it. Meanwhile the ones that are in the overlap and like both stay subscribed for longer, as they alternate between the two versions as each is updated and the other is in a lull. Seems like a win-win situation to me.

Originally Posted by SirBeef

It was never an issue during tax time nor during the 3 audits we had either. Could it be becasue customers received "free"a winter package of ice melt as part of any prepayments? Or that they were always in full? I just know what my accountant did and it never seemed to be an issue.

It should be an issue that is picked up on. For a simple example if you pick up a contract in December 2020 to supply goods in 2021 for £100,000 and you record that as sales in Dec '20 then your sales for 2020 will be inflated by £100,000 and understated by £100,000 in 2021, this could have dire consequences if you were looking to secure investment or finance as it would look as if your business is in decline. Now imagine the issues you would face if the customer cancelled the contract in early 2021 and you had to refund the full amount. Therefore you should record the cash as an asset and record a liability for the same amount until the contract is fulfilled and it is then realised as sales revenue.

I imagine that if an accountant is reviewing your accounts they are already recording deferrals and accruals in the correct periods as required but as it all very boring they are probably not telling you the gory details.

Classic is still very popular in China, Shadowlands is vastly more popular than Classic outside of China. There's plenty of stupid stuff in this thread I don't feel like addressing but I'll just leave this here:



Every single metric available will show that Shadowlands is significantly more popular than Classic outside of China. Every single one.

Originally Posted by Kolvarg

Realistically, it's very possible that Shadowlands did not do as well as other expansions, but WoW in general is still doing very well because of the mix of Shadowlands + Classic. But that's not at all what I'd call a critical state, and we certainly don't know it for sure.

As I already said: WoW is nowhere close to dying with at least 3M active users. That's more than many other MMOs that are running healthy have combined. However the numbers suggest, that the players are not very happy with the direction the game is steering to. If it is the story or the content, or the genere in general I can hardly tell, but that Shadowlands was not very successful as an expansion, that can be interpreted from the numbers we have.

Originally Posted by twothe

As I already said: WoW is nowhere close to dying with at least 3M active users. That's more than many other MMOs that are running healthy have combined. However the numbers suggest, that the players are not very happy with the direction the game is steering to. If it is the story or the content, or the genere in general I can hardly tell, but that Shadowlands was not very successful as an expansion, that can be interpreted from the numbers we have.

Well, I think it's not unfair to say Blizzard is quite profit oriented. They've had a decade of trial and error, and a shitton of data collected from player habits and reactions to their design choices. The thing is, the game isn't just steering into a new direction all of a sudden, it's been steering in this direction for years and years. Do you really believe that if they thought for one second that changing the direction the game would greatly increase MAUs and overall player retention, they wouldn't have done it by now?

I'm not judging whether the game would be better or worse for it - I think that's ultimately subjective. But it seems counterintuitive to insinuate that Blizzard is somehow supporting their designer's stubornness isntead of forcing them to do what's more lucrative.

Originally Posted by twothe

As I already said: WoW is nowhere close to dying with at least 3M active users. That's more than many other MMOs that are running healthy have combined. However the numbers suggest, that the players are not very happy with the direction the game is steering to. If it is the story or the content, or the genere in general I can hardly tell, but that Shadowlands was not very successful as an expansion, that can be interpreted from the numbers we have.

This is just factually untrue from the only real info we have.

World of Warcraft player and engagement trends since the Shadowlands release are stronger than levels typically seen at this point after an expansion launch.

Originally Posted by glowpipe

This is my counterclaim to his moronic delusions.
Wow classic, as of writing this.
Full pop servers: Eu = 0. Na = 0
High pop servers: Eu = 5. Na = 6
Normal pop servers: Eu = 31. Na = 28
Low pop servers: Eu = 7. Na = 7

Wow shadowlands
Full pop servers: Eu = 20. Na = 34
High pop servers: Eu = 45. Na = 68
Medium and low, Stopped counting after 100 for both EU and NA. Individualy

Source: https://worldofwarcraft.com/en-us/game/status/eu

This is a fairly sensible data point to look at. While we don't know if Retail Server size is calculated in the same way a Classic Server is - I think assuming they are equal is not a terrible idea.

You could also check out https://ironforge.pro/servers/ for data on classic players seen in Wowlogs. While this doesnt cover the total population, it should likely capture the vast majority of players given raiding is the main source of gameplay currently.

I would note that the comparison is end of a game cycle (last raid Classic) v. Start of a game cycle (first raid Retail) so to take it with a grain of salt from a comparative basis.

Lastly - Wow Classic is absolutely not carrying WoW as a whole. It certainly would have injected a significant number of MAUs (i'd guess between 20-30%) as well as keeping active levels higher during the lul in content. Ultimately the proof is that Shadowlands hasn't drastically shifted towards being Classic like. There have been some small changes, removal of warforging & reducing the abundance of drops, but ultimately Retail is (and in my view) will always be the breadwinner.

However, Classic performance has certainly countered the fairly consistent (at least on MMO) viewpoint that it was a waste of resources or it didn't have a place.